All Forum Posts by: Brandon Turner

I generally believe good deals can be found anywhere, but obviously there are better and worse areas.

I'm biased of course, but I think my area (Aberdeen, WA - Hometown to Nirvana and continual cloud cover) is one of the best I've seen for multi-family and single family homes in cash flow anyways. Appreciation out here is slower than most areas, but properties are very inexpensive. But even here, there are good neighborhoods, bad neighborhoods, good properties, and bad properties. It helps to either find someone in the area you are going to invest who knows the area well, or invest in an area you know real well.

Good luck! Let us know your thoughts.

Hi,

First, if you do not own your own home, I'd use that money and get an FHA 203K Remodel loan on a home for yourself. 3.5% down payment would enable you to buy a $100,000 property and still pay for closing costs and take your family out to dinner and have a little left for emergencies. Just make sure to research and buy the perfect deal. You should be able to, at minimum, build $50,000 equity fairly easily after repairs are done, combined with the record low interest rates and tax benefits its a no brainer.

If you do already own your own home, you can still do a FHA Remodel loan to buy an investment property, but I believe the required down payment is higher, like 10% or 20%. In that case, if you can find a house for 20-30k that is not a disaster in the "hood", then go for it. But that is going to be a lot harder to find. However, with the low rates that are out there, it would be difficult not to cashflow on properties in that price range.

I don't recommend getting an unsecured personal loan. One, it would be almost impossible, and two - the interest rates would back you into a corner where you "have to sell", and this is not the time to sell.

If you can find another investor to work with, its not a bad idea. Making money in Real Estate is hard work, mainly because of all the little problems you don't expect. Working with a seasoned investor would allow you learn from their past mistakes, and that is invaluable. But - partnerships are hard work too. Another option - stick that money in a bank account for emergencies. Then find a seasoned investor and ask to be his shadow for 6 months. Learn all you can, without risking your money. Then jump into the game.

So to sum up - 1st choice - Buy your own house and hold. 2nd- Buy a low-down cheap rental and hold (or offer it as a "Rent to own" to the renters and maybe sell. 3rd - find a mentor to work with.

Good luck! Keep us posted with what you decide to do.

I'm sure this happens to you often:

A tenant moves out on the first, and their home needs repair. So you spend 5 days fixing it up and getting it "rent ready" again. But now you've missed the biggest rush of potential tenants who want to move in the first of the month.

This happened to me, and I'm wondering what others do in this situation. We found some quality tenants who would like to move in, but not for 3 weeks at the start of next month. Should I take the 3 week loss in rent (getting the deposit to hold, of course), or keep looking for someone else who can move in sooner?

Suggestions? Thoughts?

I recently hired one of my tenants in an apartment to work for me at the apartment complex, doing maintenance work. (He is a close friend - I do not recommend letting tenants work for you).

If he works in exchange for rent, does anyone know if he is classified as an "employee" and thus subject to FICA tax withholding, workers comp, or industrial insurance (L&I in Washington State)? And if he works more than whats required to pay rent, and I pay him hourly, how is that looked at?

I did the calculations and it would cost me almost $500 per month extra to classify him as an employee.

Thanks!

Aly really nailed the core question I asked - How do you enforce payment on the first when you can't charge a late fee yet. And Steve - great answer! My lease currently says "due on the first but not considered late until after the fifth" but that can easily be changed to "Due on the first, but a late fee will not be charged until the 5th". I like that idea.

Aly asked the core question there - if a late fee cannot be charged until day three (or five or whatever) then what is the penalty for not paying on the first? It just seems to muddy up the due date.

Some of the responses here sound like "Tenants MUST pay on the first ... but considered late on the third". Not really a "must" then? So do you yell at your tenants when they pay on the 2nd, even though there is nothing you can do?

Human nature seems to want to see how close to the line they can get, so if no late fee is charged until the 3rd, then they generally won't pay until the last moment, and there is nothing we can do about it, right?

We've done alright enforcing the late fees, but still - much of our bills come out around the 1st, but most of the income comes in around the 5th. I'd like to change that.

We have one family in particular who call early every month and ask to pay on the 7th. Its really not that big of a deal - but I'd like to go pick up my rent once. (they deposit it in a mailbox onsite at the apartment).

Anyways, thanks for the response.

Anyone else?

Do you allow grace periods? Like, "rent is due on the first of the month but considered late after the 5th".

We have a 5 day grace period in our lease - but because of it, no one pays till the 5th of the month. Everyone just sees the 5th as the due date. So maybe I should get rid of it.

Also, what do you guys do about when tenants call about extensions? People seem to call every month and ask for 2 or 3 days extra to pay (due to pay days, etc). I'm thinking about allowing it, but telling people there is going to be a $20 charge for it. That way I can make some extra money being flexible.

Thoughts?

Hey folks,

Just wondering if other landlords can share their experiences in filling vacancies. Any creative ideas?

Hey Stephen,

I'm just wondering how this all turned out? Did you get the property filled up?

Thanks,

Brandon